'An unsettled world': The CEOs of America's largest companies are worried about the economy

If you were to listen to the managements and CEOs of some of the
largest companies in the US, you would assume that the world is
melting down.

In a roundup of the most recent season of quarterly earnings
calls, the Goldman Sachs strategy-research team identified the
uncertainty of customers as one of the key themes of S&P 500
managements' commentaries.

For example, the largest asset manager in the world, BlackRock,
noted the lack of conviction among investors.

"Clients do not know what to do with their money," said CEO Larry
Fink during the call.

"They are afraid and they are pulling back, as evidenced by
more than $55 trillion in bank deposits sitting in the
United States, China, and Japan alone. And even as
markets have rallied recently, many clients have missed that
upside and find themselves feeling even further behind."

Even beyond economics, it appears that CEOs are sensing unrest
and worry among Americans. Starbucks CEO Howard Schultz
highlighted the social unrest in the US in his firm's earnings
call. Here's Schultz (emphasis added):

"I think we have a situation where you have a very uncertain
election. You have domestic civil unrest with regard to
race. And I think the issues around terror have created a
level of anxiety. And so, we’re no longer looking at just an
economic downturn. There are a number of things that we
are facing as citizens, and I think the direction of the
country."

Schultz also added that this is weighing on sales and that "every
consumer brand" is impacted.

"I think generally, there’s just a broader level
of uncertainty in consumers’ minds at the moment, both
trying to gauge their financial security going forward,"
said Easterbrook. "Whether through elections or through global
events, people are slightly mindful of an unsettled world."

Economic data, such as consumer confidence and retail sales, has
slowed in the last week, but this is a very recent development.
Citi's Economic Surprise Index, a measure of whether economic
data is beating or falling short of expectations, is still in
positive territory and has been for over two months.

So to be fair, these may be just ways to try and place the
blame for less-than-stellar earnings or setting up weakness in
future quarters by blaming it on something other than their own
business.

The widespread concern from such giants, however, is certainly
not something to ignore.